Miles answers the bell

Miles answers the bell

This afternoon, well afternoon here in Berlin anyway, Abbott announced the FreeStyle Libre 2 has earned a CE Mark. Per a press release;

“People living with diabetes in Europe will now have the choice to be alerted in real-time of hypoglycemia (low glucose levels1) or hyperglycemia (high glucose levels1) through the FreeStyle® Libre 2 system, a continuous glucose monitoring system (CGM). Abbott (NYSE: ABT) today announced that it has secured CE Mark (Conformité Européenne) for its FreeStyle Libre 2 system—the next generation of FreeStyle Libre, which safely and successfully replaces self-monitoring of blood glucose without the use of finger sticks2 and now offers optional glucose alarms for patients who need them.”

Imagine that a CGM systems that offers alerts and alarms, oh wait the Dexcom system has been doing this from day one. Now from what we can tell the user must still scan for readings even though the new system does have Bluetooth technology. Which seems befuddling that Abbott did not also add connectivity to the new system and make it a real CGM. Next thing you know Abbott will start thinking that hey maybe it’s a good idea to also offer an app that helps the patient use all this damn data more effectively.

Oh wait, doesn’t Dexcom now that have that as well with their acquisition of TypeZero?

Listen we have always known these two systems would eventually be mirror images of each other in terms of performance and features. What we didn’t know is that Abbott would take their sweet time getting there. Honestly this is so damn Abbott its not funny.

It seems that Miles hasn’t gotten the memo yet that CGM isn’t about getting the data or alarms and alerts, the CGM story is the same as the BGM story was – helping patients make sense of all this data so they can more effectively manage their diabetes.

He also hasn’t figured out that it helps when you have multiple partners who work with your way cool whiz bang toy. As we witnessed this morning with Novo’s announcement Dexcom keeps adding partners who will help them sell more toys.

We have nothing against Bigfoot, Abbott’s lone partner but lets get real here Bigfoot doesn’t even a product on the market yet.

As we predicted the CGM market is following the same path as the BGM did, namely the market is commoditizing and in a commodity market price trumps performance. Price is what gains patient access through more favorable formulary position. Or to be blunt this is like everything else in the toy business this is about money.

One more thing here as we just love it that Abbott makes a big deal out of the “fact” they have sold more than 800,000 systems. We put “fact” in quotation marks as like all things in toy business the definition of a patient is rather dubious. What we would like to know is of these 800,000 patients how many are using the system excuse the expression continuously. How many of these patients tried the Libre but did not continue using it. What is the again excuse the expression stick rate.

There is no question that the Libre has a place in the CGM universe. There is no doubt that one day it will be a real CGM doing all the things that Dexcom does today. We have no doubt with all the way cool whiz bang apps available and all the sophisticated insulin dosing algorithms available the Libre will one day help patients analyze all this damn data and help them manage their diabetes more effectively. The real question is when will this day come?

Ok another thing as the US markets are now open and once again shares of Dexcom are getting hit. Yep each time Abbot says anything about the Libre Dexcom shares get hit. Each time after being hit the shares recover and move to new highs. Hey anyone remember that Dexcom was given up for dead that its shares fell below $60?

Folks we understand that when it comes to diabetes toys most of the analysts who cover these companies haven’t a clue as to how this market really works. They focus on the short term and want to make nice so that companies like Abbott like them. They have no historical perspective nor do they have any idea what really goes on in a doctors office. Understanding the patient don’t even go there.

As Momma Kliff used to say; “You can listen to these people if you like and heck even a broken clock is right twice a day. But don’t be deluded that they really understand what’s truly going on, this is a rare talent and like diabetes toy companies talent is the most important thing and is in very short supply.”